GM Ceases Operation in Venezuela as Plant is ExpropriatedPublished April 20, 2017

General Motors Co., the world's third-largest car maker, said it has stoppedoperating in Venezuela following the expropriation of its plant.

Venezuelan authorities on Wednesday unexpectedly took over GM's plant in thecentral Carabobo state, seizing production facilities and car stock, thecompany said in a statement. The company said it has been forced to lay offits 2,700 Venezuelan workers.

GM "strongly rejects the arbitrary measures taken by the authorities andwill vigorously take all legal actions, within and outside of Venezuela, todefend its rights," the company said.

The Venezuelan government, which frequently blames big business for economicsabotage, hasn't commented on the expropriation. The move happened amiddeadly nationwide antigovernment protests. The Information Ministry didn'trespond to request for comment.

The government of Nicolás Maduro and his predecessor Hugo Chávez haveexpropriated more than 1,400 companies and private assets since taking powerin 1999, according to industry group Conindustria. The vast bulk of theseized companies have since shuttered, contributing to an unprecedentedeconomic crisis rocking the country.

GM, like other Venezuelan manufacturers, has struggled for years to obtainhard currency to import car parts because of the country's stringentcurrency controls.

The company went from producing 5,052 vehicles in 2015 to zero in 2016 andhas yet to assemble a car in 2017, according to the Venezuelan auto industrygroup Cavenez.

Mr. Maduro has previously said that every idled plant would be "recuperatedby the Revolution."

The seven private manufacturers that make up Cavenez saw production fall by84% to 2,849 cars in 2016 compared with the previous year. In the first twomonths of 2017 they produced just 240 vehicles in a country of almost 30million people.

In June 2015, GM Controller Tom Timko told analysts that the market presents"significant challenges" but "continues to be very important to us."

GM in recent years has taken steps to blunt the economic effects of theturmoil in its South American business, including hundreds of layoffs andproduction cuts that helped pare losses last year by 40% vs. a year earlier,to $374 million.

Although executives predicted further improvement this year, the industry,particularly in Brazil -- the region's largest automotive market -- "has notrecovered as we expected it would," GM finance chief Chuck Stevens toldanalysts this month. Still, he said GM expects "significant" improvement inthe bottom line this year.

Post by a425coupleGM Ceases Operation in Venezuela as Plant is ExpropriatedPublished April 20, 2017General Motors Co., the world's third-largest car maker, said it hasstopped operating in Venezuela following the expropriation of its plant.

and related:

Venezuela Seizes GM, Warning Sign to U.S. Companies?By Brittany De Lea Published April 20, 2017 Business Leaders

U.S. multinationals with plants in Venezuela are likely on edge Thursday,after American automaker General Motors (GM) pulled the plug on itsoperations in the poverty-stricken country, following a government takeoverof its plant amid large-scale violent protests.

American beverage company Coca-Cola (KO), however, indicated to FOX BusinessThursday it didn't have any plans to pull its operations from the distressedSouth American country.

"There is no indication that any of our facilities in Venezuela arecurrently at risk of being altered and we're working closely with Venezuelanauthorities to assure a continuous operation in the country," the companysaid.

Some other U.S.-based multinational companies that still have operations inVenezuela, despite the country's worsening economic and political situation,include PepsiCo (PEP), McDonald's (MCD) and Goodyear Tire & Rubber Co (GT).

Japan-based international automaker Toyota (TM), which has large-scaleoperations in the U.S., told FOX Business it was keeping a close eye on howthe developing situation in Venezuela was affecting its business.

"Our operations in Venezuela have not been affected so far. Our teammembers, dealers and customers remain our top priorities, and we aremonitoring the situation closely."

Italian automaker Fiat Chrysler (FCAU) told FOX Business it would continueproduction in Venezuela.

"FCA is maintaining its production plans in Venezuela in support of effortsto rebuild the country's automotive sector."

While Venezuela sits on one of the largest oil reserves in the world,inflation within the country escalated more than 800 percent in 2016 and isexpected to surge 720 percent this year, according to the IMF. In 2016Venezuelan GDP shrank more than 18 percent.

Despite vast criticism of the country's socialist policies, the Venezuelanregime will continue to blame the U.S. -- and its companies -- for theeconomic hardship that has befallen it, Vasquez said.

"Instead of reforming failed socialist policies, the authorities areincreasing repression, so we can expect them to carry out moreexpropriations and flagrant violations of Venezuela's own laws," he said.

On Thursday, GM issued a statement claiming public authorities"unexpectedly" took over its plant, prevented normal operations andillegally removed assets including vehicles.

"[General Motors Venezolana] strongly rejects the arbitrary measures takenby the authorities and will vigorously take all legal actions, within andoutside of Venezuela, to defend its rights," the automaker said.

Many U.S.-based companies have already ceased operations in "one of theleast free economies in the world" and that trend will likely continue,Vasquez said.

"It would be surprising if the few U.S. companies that still have a presencein Venezuela would choose to remain there much longer," he said.

Venezuela has been mired in political controversy throughout recent weeksafter the country's Supreme Court, loyal to President Nicolás Maduro,temporarily rescinded the legislative powers of the opposition-led NationalAssembly. That decision, condemned by the U.S. Department of State as a"setback for democracy in Venezuela," was quickly reversed following adeafening domestic and international outcry.

Earlier this month Maduro's administration suspended the political career ofone of his top rivals, opposition leader Henrique Capriles, for 15 years.

According to Reuters Opens a New Window. , at least three people were killedduring the anti-government protests Wednesday.